QUESTION 3

1. Jeremy is offered 1,000 options on Jan 1, 2018. The exercise price is $5. In 2020, he exercises all 1,000 options when the price was $8. In 2022, he sells all 1,000 when the price was $12. Assume the options are ISOs. What is the income reported in 2020?

   		$7,000
   		$3,000
   		$8,000
   		$0
   		$4,000

QUESTION 4

1. Jeremy is offered 1,000 options on Jan 1, 2018. The exercise price is $5. In 2020, he exercises all 1,000 options when the price was $8. In 2022, he sells all 1,000 when the price was $12. Assume the options are NQOs. What is the income reported in 2022?

   		$4,000
   		$0
   		$8,000
   		$3,000
   		$7,000